SILVAR  :  Newsroom  : Real Estate Articles

Real Estate Articles

REALTOR®: June pending home sales down partly due to low inventory

Wednesday, August 1, 2012

California pending home sales dipped in June, but still higher than the previous year for the 14th straight month, according to the latest California Association of REALTORS® (C.A.R.) report. The National Association of REALTORS® (NAR) also reports nationwide pending home sales declined in June. REALTOR® officials say the low inventory is slowing home sales.

C.A.R.'s Pending Home Sales Index dropped 3.8 percent from a revised 126.1 in May to 121.4 in June, but pending sales were up 4.7 percent from the 115.9 index recorded in June 2011. June marked the 14th consecutive month that pending sales were higher than the previous year.

REALTOR® officials point to low inventory as the reason pending sales fell in June. "Pending sales declined in June, partly due to a lack of housing supply – especially in REO properties," said C.A.R. President LeFrancis Arnold.

NAR reports nationwide pending sales fell in June, though pending home sales remain above a year ago. NAR's Pending Home Sales Index slipped 1.4 percent to 99.3 in June from a downwardly revised 100.7 in May but is 9.5 percent higher than June 2011 when it was 90.7.

NAR chief economist Lawrence Yun also said inventory shortages are a factor in the nationwide decline in pending sales. "Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities," Yun said. "We've been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors."

Yun said there also have been delays in the closing process. "With record low mortgage interest rates, there has been a surge of refinancing on top of a higher level of home purchases, which has been creating delays recently in the closing process," he said.

According to the MLSListings, June inventory of single-family homes saw a large drop in Santa Clara County, where inventory took a dive of 38 percent from last year. Santa Clara County's June inventory of 2,589 homes was down 42.2 percent from inventory in June 2003 and down 57.4 percent from 6,071 homes on inventory in June 2008.

The nationwide housing shortage could cause problems later on, according to REALTOR® officials. "Inventory is important for housing market growth. Buyer demand is strong in our region. People are looking for a place to live and it is becoming a problem since even the rental market is tight," said Suzanne Yost, president of the Silicon Valley Association REALTORS®.

"Any bank-owned properties that have been held back in markets with inventory shortages should be released expeditiously to help meet market demand," according to Yun. "Housing starts will likely need to double over the next two years to satisfy the pent-up demand for both rentals and ownership."


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

» Back to Real Estate Articles

Site Navigation